Alignment of Organizational Structure as an Antecedent to Performance

Abstract

Structure refers to the arrangement of hierarchical levels in an organization. It may be as the allocation of work roles and administrative mechanisms that allow organizations to conduct, coordinate, and control their work activities. Numerous dimensions of organizational structure have been studied in conjunction with strategy and performance, including specialization, formalization, size of administrative components, size of staff components, centralization of authority, vertical span, number of operating sites, extent of formal controls, proportion of professionals, and liaison devices. Organizations vary significantly in their structure and this has different effects on organizational and individual performance. Structure is therefore very important and significant to an organization performance. Strategy is a comprehensive master plan for achieving the objectives of a mission of an organization. It is defined at corporate, business and functional levels of a business set up. In order to succeed, organizations usually depend on strategies for the three levels. However the relationship between the levels and the required coordination among these strategies are not straightforward. Apart from the resources availability, the success of the organization depends on the creation and existence of coordination among the units. To ensure a coordinated front there is a need to align the structure to the strategy to achieve the desired fit. In a study carried out in the sugar industry in Western Kenya, the researcher sort to answer the question on the effect of alignment of the organizational structure on its performance. To achieve its objectives the study used both primary and secondary data collected by use of questionnaires and interview guides while the existing literature reviewed. Data was collected from a study census of 50 managers and a sample of 395 farmers from the study population of 50 managers and 130,000 farmers. The methods for data collection allowed for triangulation hence ensuring validity of the data. a survey research design with a mixed approach for both qualitative and quantitative data was used. A correlation coefficient model was applied in the data analysis to determine the strength and direction of the relationship between the variables while the coefficients of determination were used to show the level of change of values occasioned by the mediating variable. The resulting P-values were used to test for the reliability of the samples for the true values of the study population. Research findings were discussed and presented using appropriate summary tables. Finally, a statistically significant effect on competitive performance was assessed at the 0.05 and 0.01 level of significance. The general findings of the study indicated that the mediating variable (strategic alignment had a significant effect on the change in variation of values on the dependent variable occasioned by changes of values of the predictor variables. The study therefore concluded that the alignment of organizational structure of the sugar industry in western Kenya significantly determines the performance of the industry and recommended an alignment of the variables to the corporate strategy to enhance performance.